Canadian stocks fell, following a 1.2 percent gain last week, as oil prices retreated after Chinese demand weakened and gold had its longest slump in five weeks.
Silver Wheaton Corp. dropped 3.5 percent after first-quarter profit missed estimates. Encana Corp. and Husky Energy Inc. lost at least 1 percent as crude fell. Torex Gold Resources Inc. and Alacer Gold Corp. slid more than 2.1 percent after gold slumped for a third day. Barrick Gold Corp., the largest gold miner, declined 2.9 percent after New Zealand’s biggest fund manager sold its investments in the company.
The Standard & Poor’s/TSX Composite Index fell 59.54 points, or 0.5 percent, to 12,529.55 at 4 p.m. in Toronto. The benchmark equity gauge has added 0.8 percent this year. Trading volume was 39 percent lower than the 30-day average.
“As China continues to slow here, people have to put in their minds that growth is more likely to come at 7 to 7.5 percent instead of 7.5 percent to 8 percent,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. His firm manages about $4 billion. “People expect China to have robust growth and it hasn’t had robust growth next to expectations for quite some time.”
Reports today showed China’s fixed-asset investment unexpectedly decelerated last month while industrial output trailed estimates, adding to concerns that the economy will fail to show much of a recovery this quarter.
China’s growth unexpectedly lost momentum in the first quarter as gains in factory output and consumption weakened. Gross domestic product rose 7.7 percent from a year earlier, data last month showed, down from 7.9 percent in the fourth quarter. China is Canada’s second-largest trading partner.
Raw-materials stocks contributed most to losses in the S&P/TSX, falling 2.1 percent as a group as five of 10 industries retreated.
Silver Wheaton lost 3.5 percent to C$23.72. The world’s largest precious metals finance firm posted adjusted first-quarter earnings of 37 cents a share. Analysts expected 39 cents on average, according to data compiled by Bloomberg.
Alacer Gold dropped 5.4 percent to C$2.82 and Torex Gold declined 2.1 percent to C$1.43. Gold for June delivery lost 0.2 percent to settle at $1,434.30 an ounce in New York. Prices have fallen for three days, the longest slump since April 4.
Barrick Gold fell 2.9 percent to C$20.50. The New Zealand Superannuation Fund, which invests money on behalf of the country’s government, said it has sold its stakes in Barrick Gold and the company’s African Barrick Gold unit due to concerns related to security, environment and community problems at mines in Papua New Guinea and Tanzania.
Energy shares declined 0.7 percent as a group. Encana slid 3 percent to C$18.74 and Husky Energy, a crude oil and natural gas producer based in Calgary, fell 1 percent to C$29.94.
Oil for June delivery lost 0.9 percent to settle at $95.17 a barrel in New York, the third straight decline. China’s crude processing reached the lowest level in eight months in April, according to data published today, and the Organization of Petroleum Exporting Countries boosted output last month to the highest level in five months.